Role of Renewable Energy Consumption, Financial Development and FDI in Promoting Trade and Sustainability: Evidence from Saarc Region

Kumari, S., Rajput, S.K.O., Soomro, N.A., Ali, R., & Ghumro, N.H. (2022). Role of renewable energy consumption, financial development and fdi in promoting trade and sustainability: evidence from saarc region. Academy of Accounting and Financial Studies Journal, 26(3), 1-15.

15 Pages Posted: 9 Nov 2022

See all articles by Sonia Kumari

Sonia Kumari

Sukkur IBA University - Business Administration Department

Suresh Kumar Oad Rajput

Sukkur IBA University

Najma Ali Soomro

Sukkur IBA University, Students

Rajib Ali

affiliation not provided to SSRN

Niaz Hussain Ghumro

affiliation not provided to SSRN

Date Written: February 26, 2022

Abstract

Developing countries are dealing simultaneously with environmental issues and trade deficits. The main objective of this study is to investigate the role of renewable energy consumption (REC), foreign direct investment (FDI), and financial development (FD) in promoting trade (imports and exports) and sustainability (ecological footprints).

Panel data are used from 1990 to 2017 of six SAARC countries including Pakistan, Bangladesh, Bhutan, Nepal, Sri Lanka, and India.

The linear and non-linear Auto-Regressive Distributed Lag (ARDL) models are used to examine the dynamic and asymmetric association of renewable energy, foreign direct investment, and financial development with imports, exports, and sustainability.

The results show that renewable energy helps improve sustainability but negatively influences imports and exports. In contrast, FDI and FD enhance the imports and exports but decline the sustainability.

Furthermore, the results confirm the asymmetric nature of the relationship among variables.
To improve trade growth and economic sustainability collectively, more effort should be placed into institutional capacity building and regulation that supports renewable energy use and investment in environment-friendly technology.

Keywords: Renewable Energy Consumption (REC), Financial Development (FD), Foreign Direct Investment (FDI), Sustainability, Imports, Exports

JEL Classification: O44, P28, P33, Q56

Suggested Citation

Kumari, Sonia and Oad Rajput, Suresh Kumar and Soomro, Najma Ali and Ali, Rajib and Ghumro, Niaz Hussain, Role of Renewable Energy Consumption, Financial Development and FDI in Promoting Trade and Sustainability: Evidence from Saarc Region (February 26, 2022). Kumari, S., Rajput, S.K.O., Soomro, N.A., Ali, R., & Ghumro, N.H. (2022). Role of renewable energy consumption, financial development and fdi in promoting trade and sustainability: evidence from saarc region. Academy of Accounting and Financial Studies Journal, 26(3), 1-15., Available at SSRN: https://ssrn.com/abstract=4261418

Sonia Kumari (Contact Author)

Sukkur IBA University - Business Administration Department ( email )

Pakistan

Suresh Kumar Oad Rajput

Sukkur IBA University ( email )

SUKKUR IBA UNIVERSITY
SUKKUR, SINDH 65200
Pakistan
00923363322855 (Phone)
65200 (Fax)

Najma Ali Soomro

Sukkur IBA University, Students ( email )

Pakistan

Rajib Ali

affiliation not provided to SSRN

Niaz Hussain Ghumro

affiliation not provided to SSRN

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